25C - AGMT - SEWER AND WATER FINANCIAL PLAN

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EXHIBIT A -2 December 16, 2013 City of Santa Ana Attn: Brian Ige PWA - Water Division 220 S. Daisy Ave. M -85 Santa Ana, CA 92703 Dear Mr. Ige: Per your request, Black & Veatch is pleased to submit to the City of Santa Ana (City) the following scope of work and fee estimate for additional work items related to the Water and Sewer Rate Studies. Task 1- Financial Support Services The City has experienced many delays and identified several potential issues with respect to moving forward on its planned water and sewer rate adjustments. As a result, under this task, Black & Veatch proposes to perform the following subtaslcs: • Update the water and sewer rate studies. Specifically, Black & Veatch will update the study to reflect fiscal year (FY) 12/13 actuals and preliminary FY 13/14 budget figures. Projections for necessary revenue adjustments will also be updated as necessary • Provide recommendations on cost recovery mechanisms for capital projects. For this subtask, Black & Veatch will work with City staff to help development funding mechanisms for specifically identified needs. As needed, we will work with Finance and City staff to outline any business processes that may be necessary to implement any recommendations. • Assist City with rate implementations. For this subtask, Black & Veatch will work with City staff to help with implementation of the recommendations from the rate studies, as well as other identified issues. Such assistance may include, but is not limited to, development of policies for reserve levels, external department cost allocations, and level of service agreements. • Assist City with Cost Allocation review. Black & Veatch understands that the City is currently updating its indirect cost allocation methodology. Under this subtask, Black & Veatch will work with City staff to help determine the impacts of changes in methodology to the utilities. 25C -21